THE HANSEN REPORT ON AUTOMOTIVE ELECTRONICS. A Business and Technology Newsletter

VOL. 13, NO. 3uu RYE, NH USA APRIL 2000

ACC in Europe, LIN: Class-A Open Mux and Soon Standard Gains Momentum in U.S. After more than a decade of competi- u The consortium that founded LIN is tive wrangling that led to few standards made up of several important industry and a poor climate for technological ad- players: Audi, BMW, DaimlerChrysler, Today’s adaptive cruise control systems vancement, the global auto electronics Motorola, Volcano Communications sense what’s ahead of the vehicle and au- industry is coming together as never be- Technologies (LIN’s developer), Volvo tomatically vary the vehicle’s speed to fore. Witness standards for 42 volts, CAN, and VW. Moreover, the founders designed create a safe following distance. Sophisti- MOST (high-speed fiber-optic communi- LIN as an open protocol, and a complete cated forward-looking detection sensors cations), OSEK (operating systems), and engineering environment that allow use either infrared laser or millimeter AMIC (Automotive Multimedia Interface others to develop low-cost communica- wave (radar) sensors—and in the not-so- Collaboration for plug-and-play infotain- tion buses. LIN will not require users to distant future, some ACC systems will use ment electronics). All of these, with the pay fees or royalties. Silicon will be avail- both—to detect/sense various target ve- exception of AMIC, came out of Europe, able from Motorola, Microchip Technol- hicles ahead. These smart devices assess/ where another promising standard is now ogy and others. measure the kinematic attributes of each emerging: the LIN protocol specification u LIN is destined for production soon. target, such as distance, relative speed and for realtime communications in embedded DaimlerChrysler will be the first carmaker velocity. ACC systems automatically ad- systems. to install LIN nodes, on a new luxury ve- just vehicle speed by limited applications LIN, which stands for local intercon- hicle that Mercedes will introduce in to the brakes or throttle. Some systems nect network, is an inexpensive, low- 2001. BMW and Audi have said that they allow the driver to specify an adjustable speed (1 to 20 kilobits per second) too are committed to putting LIN into vehicle-headway distance to the vehicle Class-A, serial multiplexing protocol. It production vehicles. Non-consortium car- ahead, for example, three headways. was designed to link switches, actuators maker Fiat has said it will likely use LIN. The driver is still expected to be alert and sensors into a sub-bus that connects In the U.S., DaimlerChrysler-Auburn and responsible to hazards in the path of to the main bus, usually a CAN bus. Ve- Turn to LIN, page 2 the vehicle, particularly because ACC hicle assembly units that could benefit obstacle-detection algorithms currently from a LIN sub-bus are door, roof, steering LIN Protocol Specification disregard nonmoving objects, even if fixed column, seat, climate control, switch in the vehicle’s path. For example, as a panel and intelligent wipers. For example, Definition: An open, Class-A, single-wire, vehicle goes around a curve, the ACC the mounted switches in a steering wheel serial multiplexing bus, based on common system would look straight ahead and assembly—wipers, headlight, turn signal, UART SCI hardware, with speeds from sense many fixed objects, such as trees and horn and cruise-control—could be linked 1 kbps to 20 kbps. LIN (local interconnect buildings that are actually beside the road. digitally on a single wire LIN bus. LIN, network) was designed to link switch Such objects are not, of course, hazards to not designed exclusively for auto applica- changes to actuators such as motors and the driver paying attention. Given the tions, also applies to industrial electronics. lights, events which happen at low speeds, potential threat of liability lawsuits from While SAE has worked unsuccessfully measured in hundreds of milliseconds. inattentive drivers using such systems, in the past to establish a Class-A standard Consortium Founders: Audi, BMW, carmakers around the world are conserva- and while several Class-A multiplexing DaimlerChrysler, Motorola, Volcano tively introducing ACC as a convenience protocols are in use around the world to- Communications Technologies (LIN’s feature. While not called a safety feature, day, none has sufficient prominence to be developer), Volkswagen and Volvo today’s adaptive cruise control systems considered a global standard. The LIN Web Site: www.lin-subbus.org should be safer than conventional cruise protocol could become that standard; it To Discuss the Specification: Please control systems, which do not see objects has a number of things going for it: contact Antal Rajnak (VCT, Gothenburg at all. u LIN will reduce the cost of Class-A Sweden) by phone, 46 31 451 116; email The first ACC systems introduced in multiplexing. By complementing, not [email protected]. Or contact Bernd the West used radar technology—to “see” competing with higher-speed multiplexing Rucha (Motorola GmbH, Munich, Germany) through fog—but now carmakers are will- standards, like CAN and MOST, LIN will by phone, 49 89 92103 395; email ing to introduce laser technology, less facilitate networks that do not need high [email protected]. Turn to ACC, page 2 bandwidth, complexity and performance. ACC... Continued from page 1 expensive than millimeter-wave radar. priced, including VAT, (value-added tax) visibility-limitation feature that advises With laser sensors, carmakers can bring at £1,400 ($2,212). Just this April, BMW drivers not to exceed certain speeds in fog. ACC to a broader range of consumers. introduced on the 7-series a Bosch radar The other key supplier of production Back in August 1997, an infrared laser ACC system for DM 3,800 ($1,862). In ACC systems in the West is Delphi Auto- ACC system was introduced on the United States in the fall of 2000, motive Systems (Troy, Michigan). Delphi Celsiors in Japan. Toyota has added ACC Mercedes will introduce Distronic on the plans to offer some ACC products with as an option to one model each year, and S- and CL-Classes. Mercedes expects to infrared laser (lidar) sensors and others over that period, about 4,000 ACC- expand availability to other models in the with millimeter-wave sensors. By 2002, equipped vehicles have sold in Japan. On United States. Delphi will supply a laser ACC system for January 1, 2000, the Estima model was ADC (Automotive Distance Con- mid-sized Opel models on the Epsilon offered with ACC as an option for trols) makes Mercedes ACC systems. platform. Omega and Vectra are built on ¥106,000 ($1,005). ADC (Lindau, Germany) is the joint ven- the Epsilon platform. Delphi will make In Europe, Mercedes was the first car- ture of Temic, a DaimlerChrysler division, less-expensive laser sensors so ACC sys- maker to go into production with an ACC with 70% and Leica with 30%. In 2001, tems can reach beyond upscale consumers. system, its radar Distronic system, intro- ADC will supply a low-cost, laser ACC “In general, there are no significant differ- duced in October 1998 on the MY 1999 system, probably to a carmaker in Europe. ences that can be perceived by the driver S-Class, priced at about DM 4,000 According to ADC, infrared sensors are while using an ACC system [that] uses ($1,960). Distronic is now available on nearly half the price of radar, so an IR either object-detection technology,” con- the CL as well. Jaguar, in September ACC system might retail for $800 to cluded Delphi engineers in SAE paper 1999, introduced a Delphi Automotive $1,000. Although IR laser sensors cannot 2000-01-0345, “Comparison of Lidar- Systems radar ACC system in the MY see through dense fog, their sensitivity to Based and Radar-Based Adaptive Cruise 2000 XKR in the UK and Germany, the existence of fog is used by ADC as a Continued on page 8

LIN... Continued from page 1 Hills, Ford and GM are looking seriously the distributed realtime architecture of the API (application program interface) speci- at the LIN specification. There is interest electrical system in the Volvo S80, which fication will be available, as well as a stan- in Japan also: Engineers at , Toyota, entered production in March 1998. Volvo dard development-tool interface. For more and are among the 150 Bus Corporation will use the technology information or to register for specifica- requesting copies of the specification so in its new generation of city buses and tions, visit www.lin-subbus.org. u far. In the U.S., is anticipating that coaches. it will be asked to develop gateways that Located in Gothenburg, Sweden, VCT link LIN to other vehicle buses, CAN for is privately owned, founded in 1998 by THE HANSEN REPORT ON instance. Antal Rajnak and Dr. Ken Tindell, man- AUTOMOTIVE ELECTRONICS DaimlerChrysler expects that the com- aging director of Northern Realtime Ap- munications cost per LIN node will be plications. Because “software complexity is © 2000 Paul Hansen Associates, 11 Went- “two-to-three times lower when compared expected to increase by a factor of over 25 worth Road, Rye, NH 03870, USA; Tele- to CAN.” The carmaker expects to use compared with our most advanced prod- phone: 603-431-5859. Fax: 603-431-5791. between 3 and 10 LIN nodes per vehicle. ucts to date,” and because signaling re- E-mail: [email protected]. All rights If LIN becomes widely used, new mecha- quirements are expected to grow by 7% to reserved. Materials may not be reproduced tronic components like smart sensors, 10% annually, VCT’s founders believed in any form without written permission. The actuators and switches would become the time was right to bring their realtime Hansen Report on Automotive Electronics is available and cost-effective as manufac- networking solutions to the commercial published 10 times a year, monthly; July/ turers compete to offer them to all marketplace. Substantial funding in August and December/January are com- carmakers. As more components are 1999—worth 15% of the company’s bined issues. The annual subscription rate is linked digitally, controlling and diagnos- shares—came from a joint investment by $577 (North America), $617 (elsewhere). ing the various vehicle systems electroni- Volvo Technology Transfer AB (part of Back issues are available for $40 each; see cally would be easier. Plus, electrical the Volvo Group) and 6:e AP fonden, a our online index at www.hansenreport.com. reliability will improve as cable harnesses major Swedish pension fund. VCT is Paul Hansen Associates is a strategy and become significantly smaller. In short, looking for a strong automotive partner. market research firm consulting to the elec- high-end functionality would appear in The company plans to go public in four tronics industry. low-end vehicles. years. For more information, go to Publisher/Editor Paul Hansen LIN was developed by VCT (Volcano www.vct.se. Senior Editor Heather Parker Communications Technologies), a 24- The LIN consortium is providing cop- Managing Editor/ Brianne Wolfe person engineering consulting firm whose ies of its protocol specification; later a Circulation Manager founders were instrumental in developing configuration language description and ISSN 1040-1105 Page 2, April 2000 The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com 1999 Automotive Electronics Business Roundup

North America support staff at DaimlerChrysler headquarters to have a 9% share of the $20 billion market for Autoliv in Auburn Hills, Michigan. Current product lines electrical distribution systems, making Lear the 1999 Consolidated Sales: $3,812.2 million are radios, engine control modules, body con- third-largest EDS supplier in the world. Change from 1998: up 9.3% trollers, transmission controllers and instrument 1999 Operating Margin: 9.7% of sales, com- clusters. TRW Automotive Segment pared with 10.2% of sales in 1998. Huntsville expects standard costs to remain 1999 Sales: $11,329.7 million, including sales According to Autoliv, operating margin was flat in 2000, partly because product changes to from LucasVarity, acquired in March 1999. Ex- affected by higher R&D spending. Airbag sales the 2001 model year minivan will result in 4 to 8 cluding LucasVarity’s sales, 1999 sales were rose by 12% to $2,715 million in 1999, and the weeks of assembly downtime. $7.2 billion, the same as TRW’s Automotive company received its first order for rollover pro- Segment sales in 1998. tection systems. Autoliv’s acquisition of Izumi, Delphi Automotive Systems 1999 Operating Margin: 7.2% of sales, com- Japan’s second-largest steering-wheel maker, 1999 Sales: $29,192 million pared with 7.9% in 1998. (Excluding the was completed in January 2000. In February Change from 1998: up 2.5% LucasVarity business, operating profit would 2000, Autoliv announced plans to acquire the 1999 Operating Margin: 5.8% of sales or have declined 11%.) seatbelt business of the Japanese manufac- $1,682 million, compared with a loss of .8% TRW Automotive Electronics 1999 Sales: turer NSK, and in March of this year, Autoliv ($221 million) in 1998. $1,631.7 million bought airbag-initiator supplier, OEA. 1999 Sales by Product Sector: Change from 1998: up 44% with the acquisi- Electronics and Mobile Communications: tion of LucasVarity DaimlerChrysler Huntsville $5,296 million, up 9.8% from 1998 1999 Automotive Electronics Operating 1999 Standard Costs: $1.035 billion Safety, Thermal and Electrical Architecture: Margin: 7.8%, roughly the same as 1998. Change from 1998: up 15.6% $10,512 million, down 6.4% from 1998, due to If LucasVarity sales are excluded from total Huntsville’s business is made up almost divesting seating and lighting businesses 1999 sales, TRW’s 11% decline in profit was entirely of internal DaimlerChrysler sales. Dynamics and Propulsion: $13,975 million, up the result of price reductions, production ineffi- There are 2,830 employees with additional 8.7% from 1998 ciencies and the costs associated with new- Delphi’s separation from General Motors product introductions, according to TRW. The World Vehicle Production Estimates was completed in May 1999. GM remains company expects growth in 2000 to come from in Millions of Units Delphi’s largest customer, accounting for 76% new business in airbags, vehicle stability sys- of sales in 1999, although Delphi grew its sales tems and electrically-assisted steering (EAS). 1999 1998 % to non-GM customers by 3% in 1999. In Janu- TRW currently has 12 production or develop- Change ment contracts for EAS. Western Europe ary 2000, Delphi completed the acquisition of Passenger Cars 14.47 14.44 0.2 Lucas Diesel Systems from TRW Inc. Accord- Trucks 2.30 2.27 1.3 ing to J.T. Battenberg, CEO and president of Visteon Automotive Systems Total 16.77 16.71 0.4 Delphi Automotive Systems, electronics and 1999 Sales: $19.4 billion other high-tech systems will account for about Change from 1998: up 9% North America 60% of Delphi’s business by 2005, compared 1999 Operating Margin: 6.1% of sales, com- Passenger Cars 8.27 8.06 2.6 pared with 6.4% of sales in 1998 Trucks 9.04 8.04 12.4 with 40% today. Total 17.31 16.10 7.5 Electronics Sales in 1999: 2.976 billion, up Lear 2% from 1998 Japan 1999 Sales: $12.429 billion Sales Breakdown by Division: Interior/Exte- Passenger Cars 8.10 8.05 0.6 Change from 1998: up 37.2% rior Systems, 30%; Chassis Systems, 28%; En- Trucks 1.80 2.0 -10.0 ergy Transformation Systems, 20%; Climate Total 9.90 10.05 -1.5 1999 Operating Margin: 5.7% of sales com- pared with a loss of 1.2% in 1998 Control Systems, 18%; Glass Division, 4%. South Korea 1999 (May to December) Lear Electronics Moving toward its goal of increasing to 20% Passenger Cars 2.36 1.61 46.6 and Electrical Distribution Systems (LEED) sales from non-Ford customers by 2002, Trucks 0.48 0.34 41.2 Visteon’s business from outside customers in Total 2.84 1.95 45.6 Sales: $1.6 billion Lear acquired United Technologies Automo- 1999 rose to 12%, from 9% in 1998. During ROW tive in May 1999. Shortly after the acquisition, 1999 Visteon signed product development Passenger Cars 6.86 6.53 5.0 Lear sold the Electric Motor Systems business agreements with Bang & Olufsen, 3Com and Trucks 3.92 3.56 10.1 that came with UT Automotive. LEED encom- Sumitomo. Total 10.78 10.09 6.8 passes what remains of UTA’s electrical and Europe World Total electronics business. UTA’s interior trim prod- Passenger Cars 40.06 38.69 3.5 ucts business was absorbed into other parts of Bosch Automotive Equipment Business Trucks 17.54 16.21 8.2 Lear. Seat systems account for 60% of Lear’s 1999 Sales: DM 35.1 billion ($17.3 billion) Total 57.60 54.90 4.9 sales, and interior trim products and compo- Change from 1998: up 9.7% Source: Pemberton Associates, Rugby, Warwickshire, nents, 28%. With the integration of the UTA UK; Telephone and fax: +44 1327 260374 electrical and electronics business, Lear claims Continued on page 8

The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com April 2000, Page 3 The Company Profile... ATX Technologies

Thumbnail Sketch ATX Sales and EBITA* by Year Distinctions Claimed by ATX in $ Thousands Corporate Headquarters: 10010 San u Teamed with Ford and Motorola to Pedro, San Antonio, TX 78216-3847 USA introduce the first in-vehicle telematics Automotive Headquarters: 8550 Freeport system in North America, in 1995 Parkway, Irving, Texas 75063-2547 USA; u Teamed with Garmin International in Sales telephone 972 753 6230; fax 972 753 6300 1999 to introduce in the U.S. the first 1,309 2,204 8,542 30,602 89,857 190,948 Web Site: www.atxtechnologies.com telematics service option on a wireless Products: Emergency/navigation services; EBITA handset location-based information to motorists (9,493) (17,023) (18,014) (8,869) 26,637 57,066 u The largest telematics-dedicated 1999 Sales: $2.2 million response center operations in the world, 2000 Sales Estimate: $8.5 million with facilities in San Antonio and Dallas, Investment (as of April 2000): $72.8 million Texas Ownership: Privately held with almost 70% by Dr. James R. Leininger, an entrepreneur Employees by Function from San Antonio, Texas; other key investors include Nichimen America and Alpine Product development 48 Electronics of America. Sales and marketing 30 Markets: U.S.A. and Canada 1998 1999 2000 2001 2002 2003 Response center services 125 Subscribers: 90,000 Est. Est. Est. Est. Hardware operations 25 Employees: 243 *Earnings Before Interest, Taxes and Corporate and administrative 15 Amortization Total 243 Background ATX Technologies is a telematics ser- GPS technology to mobile monitoring telematics product for fleet management, vice provider. “Telematics” has been based on work that its parent company according to ATX. defined as the marriage of telecommunica- had done with the U.S. Department of “Although it took the [telematics] in- tions systems and computers to transfer Defense. In 1996, Protection One Mobile dustry four years to reach 100,000 custom- data to other computers. In its most basic Services teamed up with Ford Motor ers, I’m confident that there will be nearly form, as is used here in this profile, Company and Motorola to launch Lin- 1.5 million customers by the end of 2001,” telematics is wireless communication that coln RESCU, the first in-vehicle, emer- said Steve Millstein, formerly with Protec- sends data about the location of a vehicle gency-response system. RESCU integrated tion One Mobile Services and currently or portable handset/phone, along with location-based, GPS satellite technology ATX Technologies president and chief other data, with or without voice, to the and hands-free cellular telecommunica- operating officer. response center. tions to send messages to a 24-hour call ATX’s major stockholder, Dr. James center. In 1999, Protection One and Product Evolution: From Safety/Security Leininger is a co-founder of ATX and Garmin International claimed to be the Features to Content Aggregator remains a director on the board. Dr. first to bring telematics to the wireless Mr. Millstein believes that the Leininger also holds a majority interest in market. telematics industry is much like the PC more than twenty public and private com- Meanwhile, in early 1996, ATX intro- industry was more than 10 years ago when panies. Today’s company is the result of duced telematics to the automotive after- a few applications like Word and Lotus the August 1999 merger between Dallas- market with On-Guard Tracker, a cost- spreadsheet existed and the potential of based Protection One Mobile Services and effective, in-vehicle tracking system. The the Internet was unrealized. In telematics San Antonio-based ATX Technologies. following year, ATX joined forces with today, consumers are interested in only a Both merger companies have pioneered in AT&T Wireless Services and Standard few of the many possible applications, the telematics industry. Prior to the Communications to provide seamless na- mainly safety and security features, and for merger, ATX Technologies had been tional cellular coverage for implementa- at least the next three or four years, most known primarily for its On-Guard Track- tion in On-Guard products with ATX revenues will come from services ing Systems products. embedded cellular phone, creating the related to safety and security. Although Protection One Mobile Services began first product that allowed simultaneous data about the vehicle’s location and in 1995 as a division of Westinghouse Se- voice and data transmission. Marketing of status will be automatically sent, the mo- curity Systems, which offered security On-Guard Tracker went beyond indi- torist will always be able to speak directly products for the home. Westinghouse Se- vidual car owners, expanding to commer- to an operator at a response center. Mr. curity Systems had previously applied cial applications and becoming the first Millstein speculated that in the future

Page 4, April 2000 The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com The Company Profile Continued customers might receive safety features for u GM announced that by the end of free in exchange for the ability to do “p- ATX Top Customers this year, one million cars would be commerce” (position-based commerce) Automotive OEMs OnStar equipped, and a year after that, and for the value gained from their loca- Ford (Lincoln, Jaguar) two million cars would be so equipped. tion data. Revenues would be realized by Nissan () u Mercedes announced that TeleAid providing on-demand, location-based Mercedes-Benz USA would be standard across its entire plat- commerce, infotainment and advertising, Mercedes-Benz Canada form, in other words even on non-luxury based on the consumer’s permission-based vehicles, those that sell for under $30,000. profile. Aftermarket Moreover, ATX aims to make its Today, the way ATX’s service provider Alpine telematics services available to people business works is through the sale of its with wireless handsets. By 2008, according location services to a carmaker. The car- Commercial Accounts to the Chase memorandum, 25% of all maker might also buy other services from ADT Security Services new handheld wireless phones will be able other providers, and then market all the Budget Rent-A-Car to transmit their location and will be ca- services to the consumer. As telematics Greyhound Bus Lines pable of handling data/information. ATX systems advance, great amounts of data Progressive Insurance is planning to have 20% of that market, will flow in two directions, from the ve- yielding an additional 9.4 million sub- hicle to service providers and from service The company will use the proceeds scribers. By 2008 in all markets, reports providers to the vehicle. At some point in from this round of financing for market- Chase, ATX will serve nearly 17 million the future, ATX will not have modems at ing, operations and development as well as subscribers, producing $1.39 billion in ser- its service center but instead will have to repay a bridge loan taken to purchase vice revenues. routers that append voice to the data com- Protection One Mobile Services. Despite munications and provide a faster, more investing $70 million thus far and its call Strategy robust way to route the calls. ATX says it for $60 million in additional financing, ATX is targeting North America. If the has patents to do that. ATX says its cash flow will turn positive in company goes into another market, it ATX doesn’t necessarily create content, the fourth quarter of 2001 and be positive would be through an affiliation; currently, rather ATX is a content aggregator, like from that point on. Continued on following page AOL on the desktop. After several years, ATX and other telematics service provid- Sales Projections ATX Subscribers by Market ers will offer their own portals to the In a study just completed by the world that would provide a revenue Dohring Company for ATX Technologies, 2008 Total: 16,991,000 stream separate from particular car-centric 74% of current telematics customers said Aftermarket Automotive services. ATX says it will align itself they definitely or probably would install a & Commer- OEM, 36% with a branded portal like AOL, Yahoo telematics system in their next vehicle; cial, 9% or Microsoft’s, allowing the motorist ac- 84% said they definitely or probably cess to content that fits his/her own indi- would recommend telematics to a friend. vidual profile no matter what vehicle is According to sales projections by Chase being driven. Mr. Millstein believes that is Securities, published for an ATX fund- what OnStar is trying to create: a brand raising memorandum, 45% of all new ve- Handheld Wireless, 55% name for a portal that can be accessed hicles built in 2008 will have telematics Data: ATX and Chase Securities Inc. from any vehicle. platforms. Further by 2008, 20% of those telematics platforms will involve subscrip- ATX Service Revenues by Market Current Finances tions to ATX services, and the company ATX is currently negotiating to close a will service 6.1 million subscribers from 2008 Total $1.39 Billion round of equity financing, hoping to raise automotive OEMs. Ultimately, ATX be- Automotive OEM $60 million. ATX’s initial business strat- lieves that telematics platforms will be Aftermarket & Commercial ($96/ ($120/yr. per egy was to remain independent of any car- standard on all vehicles. According to Mr. yr. per sub.), sub.), 49% maker—unlike 100% GM-owned OnStar. Millstein, there are three recent develop- 9% ATX does not rule out, however, a car- ments that support such optimism: maker taking an equity position in the u In October 1999, Ford CEO Jacques company, as Ford has done with Sirius Nasser announced that beginning in MY Satellite Radio, based in New York. (ATX 2001, RESCU would be standard on Lin- and Sirius recently announced an alliance coln models sold in North America, as to provide radio programming for the well as on some MY 2001 lower-priced Wireless ($72/yr. per sub.), 43% vehicle.) Fords in Europe. Data: ATX and Chase Securities Inc.

The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com April 2000, Page 5 ATX Technologies the company is having such discussions in vehicle services available for handheld 1999 Mercedes-Benz USA and Mercedes- Europe. The only other major automotive devices. ATX has a wireless sales team to Benz Canada chose ATX as its location telematics service provider serving the serve wireless carriers. While the wireless services provider. Mercedes-Benz USA United States is OnStar, 100% owned by telematics industry may be two years be- plans to offer telematics equipment as a General Motors. hind automotive telematics, the wireless standard, factory-installed feature on all ATX believes three attributes distin- industry will eventually move ahead. models as of model year 2001; today, guish the company from others in the TeleAid is standard on all models in the telematics industry: several years of experi- Response Center U.S. with the exception of SLK and M- ence in both automotive and wireless ap- Since emergency services predominate Class. Mercedes total North American plications, independence from carmakers, today, the company employs 82 operators vehicle sales was 144,000 units in 1999, and an open architecture with open hard- for 90,000 subscribers. ATX believes the according to Automotive News. ware and open wireless protocols. Since optimal ratio for emergency services from u Nissan signed a four-year agreement ATX is independent, the company says it a telematics response center will be a bit with ATX in April 1998, for ATX’s emer- is attractive to carmakers who do not want lower, closer to 4 operators for every 5,000 gency service program, an option across to do business with a competitor’s service vehicles. Moreover, the ratio in the future the Infiniti line, and is working to develop provider. ATX feels that its past experi- will be even lower because as more non- an enhanced system for more vehicle lines ence with different customer demographic emergency services are offered, more re- in 2001. segments and with various platform tech- sponses will be automated. Technology is u ADT’s 500-person sales organiza- nologies—Ford, Infiniti and Mercedes— going to reduce operator involvement, tion distributes ATX services to its com- gives the company unique expertise in predicted Mr. Millstein, but he hastened mercial security customers. managing the entire environment of to add that the motorist would always be u Brinks has a contract to sell ATX telematics. able to reach an operator. ATX’s research services as an extension of Brinks’ home “We designed our technology in a way indicates live operators are critical to mo- security services. that would allow us to take on a new hard- torists’ feelings of security. u Budget-Rent-A-Car: ATX provides ware platform in the vehicle … Motorola The company recognizes that there is a asset-allocation support, car emergency today or Visteon tomorrow, whatever, clear need for voice-recognition and text- and navigation services. without changing our infrastructure,” to-speech technology platforms at the re- u Greyhound has an asset protection, noted Mr. Millstein. With flexible, open sponse center, two reasons: safety in the driver navigation and emergency system architectures, customers can choose what- car and lower costs. Voice recognition handled by ATX. ever hardware platform is most economi- could take the place of live operators for u Protection One has a contract to cal. “Hardware suppliers like Alpine, some services. A car with less hardware sell ATX services to their home security VDO, Bosch, , Motorola and and a center with fewer operators and customers. Nokia tell the company that when they go more technology would yield savings, for in to talk to GM, they are a vendor, but example, navigation from continuously Companies Working With ATX when they come to talk to us, they are a updated databases at the center instead of u Alpine resells ATX services to its technology development partner,” sug- CD-ROM equipment and CDs in the car. equipment customers through Alpine’s gested Mr. Millstein. ATX customizes each aftermarket distribution channel. Alpine of its programs by contractor. ATX’s data ATX Customers is an equity investor in ATX. center can handle several formats for wire- u Ford: ATX and Ford are planning a u Bosch developed the onboard plat- less data: AMPS, CDMA or TDMA. “I broad rollout of telematics services on form for the Mercedes TeleAid system ad- guarantee nobody else can do that,” stated Ford’s mid-level lines starting in 2001. ministered by ATX. Mr. Millstein. ATX is currently at the end of a four-year u Clarion Auto PC: Assist Service is According to the company, some audio contract to provide telematics services for provided by ATX. and electronics manufacturers in tele- MY 2000 Lincoln Continental, Lincoln u Electric worked with matics are at a disadvantage because they LS and Jaguar X-200; RESCU is available ATX on a voice/data telematics offering are not experts at wireless technology and as an option on these models. ATX and for auto OEMs. do not know how to handle the data com- Ford are currently negotiating a contract u Motorola developed the equipment ing in over a wireless network. The com- to cover beyond MY 2000. platform for ATX services for Mercedes, pany feels knowing both automotive and u Mercedes-Benz USA, expected to Ford, Jaguar and Nissan. Denso helped wireless data technology is a big advan- be the largest ATX customer in the near develop the equipment platform for Jag- tage. Roadside providers have not prolifer- future, signed a four-year contract in No- uar. ated because they are only voice call vember 1998 and launched ATX services u Nichimen has equity position and centers, not data response centers like under the TeleAid brand in March 1999. supports ATX’s work with Alpine and ATX’s. Plus, ATX surveys of automotive ATX expects to take on about 15,000 new other Japanese companies. users suggest they want a subset of ATX TeleAid subscribers per month in 2000. In u Nokia: letter of understanding to Page 6, April 2000 The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com The Company Profile Continued jointly develop telematics products and Three to four years, however, can pass frustrated Mr. Millstein told us. “We are services from the time a design for a new hardware merging an industry that has long cycle u Pioneer: letter of understanding to platform is frozen until it is available in times with e-commerce, dot coms and work on early-stage development of the market. “Our ability to create a new Internet industries that have two-month Pioneer’s aftermarket telematics products product to meet a market requirement is cycles.” ATX is developing technologies u Sirius Satellite Radio: alliance to much faster than the electronics manufac- for its third-generation architecture in- integrate ATX’s two-way wireless commu- turer’s ability to build, and then [after volving a telematics server and portal. u nications and automotive location-based that] the OE’s ability to get it in a car,” a technologies with Sirius’ 100-plus com- mercial-free audio channels broadcast ATX’s Services from NYC via satellite Current Services times. Since the driver must either remember u TRW: letter of understanding to u Emergency Response: In an emergency, or transcribe the directions manually, this work jointly on a telematics product a subscriber presses a button in his/her service is specifically targeted at distressed u VDO Mannesmann: letter of under- vehicle or on a wireless handset, or if the drivers looking for directions to nearby, standing to collaborate on ATX develop- airbag inflates (see below), and the caller’s essential services. ments on behalf of automotive OEMs location and vital information are transmitted u Visteon: joint development program to the ATX call center and displayed on the Services Under Development in support of Nissan center’s workstation, while an operator According to ATX, the following services will establishes voice contact with the caller. After be launched by the end of 2000. ATX Products determining what help is needed, the operator u Traffic information: On-demand, ATX feels it serves both the carmakers’ contacts the appropriate response agency advance warning of local congestion, road interests and those of the end consumer near the caller and directs it to the caller’s closings and traffic incidents. Initially, who has purchased the vehicle. Mr. location. depending on the equipment platform in the Millstein explained: “We deliver to u Automatic Collision Notification: The vehicle, ATX will provide text information but carmakers a whole new way of marketing emergency response is triggered automati- later will add other formats, including text-to- to their customers. On average, carmakers cally when a vehicle’s airbags or seatbelt speech and map/graphical displays. Traffic only take in about $20,000 of the total pretensioners are actuated or when a information is now available in about 60 $80,000 consumers spend while they own collision sensor signals a crash. major metropolitan markets. that vehicle. Telematics services can help u Roadside Assistance: With the press of u Enhanced Voice Navigation: The them [take in more].” To the consumer, a button, the driver can establish voice second generation voice navigation will ATX delivers “peace of mind,” ensuring contact with the ATX call center. ATX also reduce the time needed to generate a route assistance to the exact location whenever provides enhanced roadside assistance by and will offer a larger database of addresses needed. electronically sending the subscriber’s data and points of interest. In order to receive basic safety and se- file (consisting of the vehicle’s location and u Internet-Accessed Information curity services, some inexpensive electron- profile) to the roadside assistance provider. Services: Users will be able to select ics hardware must be embedded in each u Stolen Vehicle Tracking: When a vehicle information services such as news, weather, vehicle: a cellular phone circuit, a GPS is reported stolen, the ATX response center financial data or sports, from a personalized satellite receiver for location data and a can locate the vehicle and direct police to its home page, through ATX’s partnerships with modem to send that data. This equipment location. national information providers. The informa- is referred to as a thin client because its u Security System Notification: ATX can tion can be delivered to a vehicle’s onboard capability is limited. Over the next several notify a subscriber when his vehicle security computer or to a mobile device. Initial years, carmakers including GM, Ford and system has been activated and initiate versions of the service will use the DaimlerChrysler will embed thicker cli- tracking upon verification that the vehicle is customer’s pre-set profile settings, but future ents into their vehicles, starting with their missing. offerings will be based on the user’s current highest-priced vehicle lines. Such hard- u Lost and Found: A concerned subscriber location and will also be interactive. The ware/software computing platforms will can have the ATX center locate a teenager or initial version will be available by the end of handle multimedia, have a display, have an elderly person, and once the vehicle or 2000. digital memory, be capable of recognizing handheld device is located, request that the u Email, calendar reminders and voice commands and convert text mes- missing person check in. messages: In conjunction with automotive sages to speech, emails for instance. As u Remote-Vehicle Unlock: Subscribers can and electronics manufacturing partners, ATX thicker clients are installed in vehicles unlock their vehicles by calling an interactive will offer users the ability to access email and as ATX offers more sophisticated ser- voice response center or by speaking to an through the user’s home page or any email vices, less involvement by operators will operator. software, depending on the capability of the be needed, reducing costs. u Voice Navigation: Operators can provide in-vehicle hardware. Calendar reminders turn-by-turn directions and estimated travel could also be sent to the vehicle. u The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com April 2000, Page 7 Roundup... Continued from page 3 Automotive sales in North America for Rob- ness by 20% in 1999, with new orders for fuel TEMIC Automotive Electronics ert Bosch Corp., the wholly-owned U.S. subsid- systems, instrumentation and engine control 1999 Sales: 890 million euros ($880 million) iary of GmbH, were $4.2 billion, systems. Change from 1998: up 18% up 8% from 1998. The Bosch Group attributes VDO’s parent Mannesmann Group was ac- TEMIC, the automotive electronics business the growth in worldwide automotive sales to the quired by Vodaphone Airtouch PLC in February unit of DaimlerChrysler Stuttgart (Germany), growing market for navigation, engine manage- 2000. In March 2000, Mannesmann reorga- expects continued growth in 2000. Incoming ment, fuel-injection technology and electronic nized its Automotive and Engineering divisions, orders increased by 38% in 1999 to 1 billion stability control systems. Bosch increased its including VDO, into Atecs Mannesmann, which euros ($977 million), and 535 new employees share in (Japan) from 30% to 50.04% in was to be IPO’d in June. Later in March, Atecs were hired. New applications of electronics in- 1999. Mannesmann and Siemens agreed to merge clude CVT (continuous velocity transmission), VDO with Siemens Automotive in a 50-50 joint adaptive cruise control and telematics. TEMIC Magneti Marelli venture called Atecs Siemens, to be based in expects strong growth for its voice-recognition 1999 Consolidated Net Revenue: 4,062 mil- Frankfurt, Germany, with sales estimated at 7 system, which was acquired from Daimler- lion euros ($3,970 million) billion euros ($6.8 billion). As we go to press, Benz’ Aerospace division (Dasa). Change from 1998: up 7.1% the fate of the Siemens and the 1999 Operating Margin: 2.7% of sales, com- IPO of Atecs Mannesmann is uncertain, in light Valeo pared with 1.5% of sales in 1998 of an offer from ThyssenKrupp to buy all of 1999 Sales: 7,717 million euros ($7.5 billion) Magneti Marelli, a subsidiary of Fiat Group, Atecs Mannesmann. Change from 1998: up 28.2% plans to focus on core businesses that include 1999 Operating Margin: 6.3% of sales, up lighting and engine control and to invest further Siemens Automotive Systems 14% from 1998 in cockpit modules, suspensions and telemat- 1999 Sales (fiscal year ending September Net income increased 117%, due mainly to ics. The company strengthened its lighting busi- 30, 1999): DM 6.4 billion ($3.2 billion) the sale of Valeo’s 50% stake in LuK, a Ger- ness with the 50-50 joint venture, Automotive Change from 1998: up 14.3% man clutch manufacturer. Valeo increased its Lighting GmbH, set up in October 1999 with Earnings before interest and taxes: Up 6%, workforce by 1,300 employees in 1999. Accord- Bosch. The acquisition of Seima (Italy), a light- to DM 310 million ($152 million) ing to the company, the 28% sales growth was ing manufacturer, was finalized in January Siemens AT growth came from major in- a result of internal growth, especially by busi- 2000. In March 1999, Magneti Marelli sold its creases in locking and immobilization systems, nesses acquired in 1998 and 1999, most nota- rotating machines division, which includes ABS controllers, electrical distribution systems, bly the electrical systems business of ITT starters, alternators, windshield wipers and engine control units and airbag electronics, es- Automotive in 1998. Valeo generates more than small motors, to Denso. That division’s 1998 pecially in the North American market. Siemens 50% of its sales in the Electrical/Electronics sales were 330 million euros ($323 million) in AT employs 27,000 people at over 70 facilities sector, which includes Wiper Systems, Motors 1998. worldwide. In 1999 Siemens formed a joint ven- and Actuators, Electronics, Lighting Systems, ture with Navistar International to manufacture Security Systems and Electrical Systems (alter- Mannesmann VDO diesel injectors. A new joint venture with PSA nators and starters). In 1999, joint ventures 1999 Sales: 3,464 million euros ($3,385 mil- Peugeot Citroën in France will develop and were set up with Zexel (in thermal systems) lion) manufacture high-pressure injection pumps for and Unisia Jecs (transmission systems). In Change from 1998: up 10% gasoline direct injection. 2000, Valeo will be searching for more invest- The strongest growth in 1999 came from the In late March 2000, Siemens Automotive ment opportunities, particularly in technology Cockpit Systems business unit. Contributing to and Mannesmann VDO agreed to form a 50-50 start-ups and Internet-driven automotive busi- growth were Car Communications (the busi- joint venture, Atecs Siemens Automotive AG, nesses. André Navarri has been nominated to ness acquired from Philips Car Systems in but the joint venture has not yet been approved replace Noel Goutard as chairman and CEO in 1998), Kienzle Car Information Systems and by the Mannesmann Supervisory Board. May 2000. Mr. Goutard has been head of Valeo Fuel Systems. The company grew its U.S. busi- since 1987. u

ACC... Continued from page 2 Control Systems.” suppliers may well use both sensors. ADC are reduced, adaptive cruise control will Today’s ACC systems are not precise (Automotive Distance Control Systems) finally evolve into collision avoidance enough for stop-and-go traffic; they must is developing a stop-and-go ACC system systems. These advanced systems will al- turn themselves off at slow speeds. For that should be ready for the market in low the vehicle’s braking, engine and stop-and-go, sensors would need to accu- 2002 or 2003. steering systems to take control automati- rately measure distances to obstacles lo- Over time, demand for ACC systems cally from the driver as needed. It will cated zero meters to 30 meters in front of will increase as motorists become accus- be well after 2003 before collision avoid- the vehicle. Radar sensors are not accurate tomed to them—just as consumers became ance systems are acknowledged as safety enough, although infrared sensors do near- accustomed to conventional cruise con- features that can dependably recognize distance measurement well. To implement trol, now in 90% of new vehicles in the which objects are hazards and which are stop-and-go obstacle avoidance, ACC U.S. As technology improves and prices not. u Page 8, April 2000 The Hansen Report on Automotive Electronics, Rye NH USA www.hansenreport.com